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What you need to know about shopping for solar panels

Following a record breaking year for rooftop solar panels in the U.S. in 2012, you can expect a flood of information overload on how to go about getting solar panels installed on your rooftop. Choosing the right solar panel service company has long taken a considerable amount of detective work to figure out what you want and what you need.

As with any retail service, consumers should expect a straight-forward dealing with installers and get what they’re promised. Most consumers, though, have no previous experiences shopping for solar, so that makes it more difficult to spot shady language in a contract or missing steps in the purchase process. An online search of solar installers in your town could turn up a long list of companies.

To help you combat the mass of information, as well as any misinformation, we created this cheat sheet of things you should consider:

1). The initial query: While you could start with a Google search for solar installers in your area, a better way is contacting your local utility or the city or state agency that oversees these utilities. Often times they have a list of installers who have already gotten the necessary certification to perform solar panel installations. California has such a statewide database. Nevada has one, too. So does New York.

2). Learn about the incentives in your region: Incentives are gonna be the key for you to figure out if you can afford solar panels. The best resource we’ve found for solar incentives by state is this great website, funded by the Department of Energy. You also could find out about rebates or tax breaks from your local utility or installers. Still, it’s a good idea to find an alternative source of information to verify what you’ve been told. The DOE-backed database not only lists incentives by states, it also includes a link to each state’s agency that administers the subsidies. From there you also could find whom to contact to ask about certified installers.

3). How to pay for it: An average-size system of solar panels, between 3KW and 5KW, costs around $18,000-$25,000 in California, according to the current pricing posted by the state’s solar program website, which is filled with other good information. The pricing in your region may be different, so comparison shop! If you can afford to buy and own a system, then you can reap the most savings over time.

If you can’t put up that much money upfront, then you now have many options to lease or get loans. You could sign up for leases in which you pay a monthly fee for solar electricity without owning the equipment. The company that provides the financing would own the system. A lease typically runs 15-20 years. Because of the growing popularity of the leases, you will likely hear about them from the installers you are interviewing. Check your local banks for loans. Admirals Bank, for example, recently launched a division that provides solar loans nationwide.

4). Lease vs. PPA: Some installers offer leases, while others do power purchase agreements. In a lease, you would usually pay a fixed amount each month regardless of how much electricity the solar panels produce (though that monthly fee may go up at some point during the lifetime of the contract). In a power purchase agreement, you agree to an electric rate and pay for the amount of electricity produced. That means your payment will likely vary from month to month, and the electric rate generally will go up over time. Sometimes installers can only provide one or the other because of local regulations governing electricity sales.

5). Gear research: There is no shortage of solar panel makers, who have more or less standardized the designs and warranties of the equipment (here’s a video about how a solar panel generates electricity). There isn’t a consumer-friendly rating system to say which manufacturers produce better products than others.

You can do your own online research, such as checking out who are among the top 10 solar panel makers in the world. But those make it onto the list because of the size of their factories. Many of those who aren’t on the top 10 also make quality products.

The key is to ask your installers about how long a manufacturer has been in business, any complaints from other consumers, and the repair and return policy. It’s no different than shopping for electronic equipment or appliances.

6). The promise: As with any financing contract, you want to read it very carefully and make sure you understand what you’ve been promised. Many installers promote the idea that if you go solar, you will end up paying less for electricity than you would otherwise. That’s an attractive proposition, especially if you have a high energy bill. But understand that those savings may not happen right away but over time.

No one can predict energy prices many years from now. Those prices depend heavily on the types of fuels used, changing regulations that might add to the cost of generation electricity and market demand. If your utility can’t promise what your electric rate will be in 10 years, how can anyone else promise that you will always pay a lower rate by going solar?

7). Keeping the system running: If you own the solar panels, then you are responsible for their upkeep. The equipment usually doesn’t require a lot of cleaning, though you may not be in such luck if you live in a dusty area or your roof is a magnet for birds. Sometimes squirrels can develop a taste for electrical cables of the system.

Your solar panels are connected to an inverter, which converts the direct current from the solar panels to the alternating current for use around the house. The inverter, therefore, can tell you if the power production dips lower than usual. You should regularly check on the inverter’s reading , and you should be able to do that on your computer or even smart phone.

If you opt for a lease or power purchase agreement, then the company that provides the financing is responsible for the equipment’s upkeep. The financing company may not be the installer who set up the solar panels on your roof, and it may end up hiring someone else to do any maintenance and repair work. You should understand who is in charge of servicing the equipment.

13 Responses to “What you need to know about shopping for solar panels”

Warranty seems to be missing from this discussion. Using a reputable brand that an installer is familiar is important so that 15 years from now you can get replacements if the efficiency suddenly drops. And depending on a utility for recommendations will be few and far between, most have not gotten on the distributed energy bandwagon as of yet. There are many many great other places to go to find installers and more information. http://www.cleanenergyauthority.com has been compiling info on all the aspects of residential solar energy for over 5 years.

Just to start, and focusing on the most important point: he article seems to imply that larger manufacturers will have high quality, though smaller players may as well.

Ucilia, I think you may have failed to mention one small fact — the largest PV module manufacturer by volume in the world, SunTech, is insolvent and being bailed out by the Chinese government. All of the other major Chinese manufacturers (most of the rest of the largest) are technically insolvent and afloat only due to massive debt ratios again underwritten mostly by local governments. Many of these “leaders” will fold in the next 18 months.

Under these circumstances quality should by no means be assumed and the warranty may not be worth the paper it’s printed on.

All PV is absolutely not the same, and it is different from buying other electronic gear because you are buying a 25 year product, not a 3 year product. Problems may not show up for 5-10 years but would impact the buyer nonetheless. Thus the experience of other consumers means little in this context.

Consumers need to do some homework, and understand both the quality of the product they are buying and the stability of the company behind it.

Many medium and small solar panel makers have filed for bankruptcy or disappeared all together. So whether a company is big or small, you have to do your own diligence. Your advice about doing homework simply repeats what I already included in the story. And no, electronic gear isn’t meant to last 3 years. You replace your washer/dryer, TV, etc. every 3 years? You are wealthier than many people I know.

First, wrt financial stability, we are not talking about “medium and small” here. Most of the largest Chinese manufacturers are on the brink of insolvency, if not actually insolvent, with debt to equity ratios that no Western company could tolerate.

Your statement that “Many of those who arenâ€™t on the top 10 also make quality products” strongly implies that those who are in the top 10 do make quality products. This is bad advice to the consumer. Not every manufacturer in the top ten makes quality products, some of these manufacturers won’t be in business in 18 months and very well know it.

You go on to say:

“The key is to ask your installers about how long a manufacturer has been in business, any complaints from other consumers, and the repair and return policy. Itâ€™s no different than shopping for electronic equipment or appliances.”

No, it is different because none of these points are particularly relevant. Longevity is at best a helpful data point. Complaints are not particularly relevant because this is, as I said, a 25 year product — not a 3, or even 10 year product as in the case of white goods. Many problems that will occur have yet to show up, and the number of consumers who purchased PV systems even 5 years ago (in the US) is extremely small so, unlike other products, there isn’t much of a customer base to generate complaints. Moreover, in general product quality was likely much higher 3+ years ago than it is now given the current cost pressures on these very financially strapped manufacturers. Needless to say the repair and return policy is irrelevant if the manufacturer goes out of business.

Finally the installer, of course, has an strong incentive to sell you a PV system so caveat emptor.

Therefore…this is bad advice.

My advice is to perform independent research on the products and the manufacturer standing behind them, not relying on the installer.

If considering a lease, the leasing company owns the system and should be taking on all of the risk associated with the points above. Make sure that is the case, and that you are comfortable with the financial stability of the entity you are leasing from and carefully read the fine print to make sure you won’t be left holding the bag if the module supplier goes bankrupt or does not honor its warranty.

Stay away from leasing unless you are a commercial business and/or the lease is less than 10 years. Solar equipment, like most everything else, is getting better and cheaper. If you tie yourself to a 20 year lease you will be saddled with inferior tech and aging equipment. The best approach is to do your homework. Learn how solar works. Set up a basic system with a modular approach and expand as you go. It will save considerably more money over the long term.

I’d be happy to provide more information if you clarify your question. Just FYI: A solar electric system is usually sized on a “per watt” basis, and 3 kilowatts-to-5 kilowatts is a common range for a residential system. You can go smaller or larger, depending on the available space on your roof and your budget. You should make sure your installer designs the system to minimize any shading from trees or a tall building next door. You don’t want to install a system only to find out later that it won’t produce as much energy as expected.